Accounting: Financial Statements!! BBI 2O1

The Balance Sheet Shows a business’s financial position on a particular date The Balance Sheet Equation – To determine the owner’s equity, use Assets – Liabilities = Owner’s Equity – To determine the total assets, use Assets = Liabilities + Owner’s Equity

Balance Sheet Preparation – Prepare a balance sheet for the monopoly game – See examples from page 281 in your World of Business text)

The Income Statement The Income Statement shows the profit or loss of a business over period of time Income Statement Equations Revenue – Expenses = Net Income Revenue – Costs of Goods Sold = Gross Profit (Inventory) Gross Profit – Expenses = Net Income Prepare an income statement for the monopoly game too Sources of Revenue: pass go, rent, ? card, etc. Sources of Expense: rent, ? cards, income tax etc. See page 285 for an example in your text